NEW DELHI, Sept 29: Sierra Optima is yet another infotech company which is all set to cash in on the software rally on bourses. Sierra Optima is planning to take the private placement route to raise fresh capital. The company is planning to issue 4-5 lakh fresh equity shares, said a company official. The equity shares will be privately placed at a slightly higher premium to the market price of the scrip, he added. Sierra Optima has seen a sharp rally in the past 31 trading sessions with the scrip rising by 60 per cent from Rs 138 to Rs 221, which is also its new 52-week high. Volumes, too, have shot up in the past four trading sessions, from 50,000 shares on September 23 to 1.48 lakh shares on September 24. On September 28, too, around 1.26 lakh shares were traded.The company will finalise the offer price and timing of the issue in the next 10-15 days and is likely to issue fresh equity shares in three-months time, according to the source.
Unlike some other software companies which have plans to float apublic issue, Sierra Optima is taking the private placement route to get a higher premium. Since the primary market has touched its nadir, investors may spurn even a software company issue with a premium more than the market price of the scrip. If the company can manage a good premium in the private placement market, it will be increasing its reserves and hence, can reward its shareholders, according to the source. Against the current market price of around Rs 221, the company has a bookvalue of only Rs 20. It has a small equity base of Rs 3.3 crore.
The company has drawn up a plan to expand its infrastructure to beef up its operations. ``The expansion of our infrastructure will enable us to take up large-size projects,'' said the official. The fund requirement will be around Rs 8-10 crore. The proposed private placement of equity shares is mainly to part finance the expansion plan and the balance fund requirement will be met through internal accruals. The company currently has 140 engineers and is planningto raise this number to 400 by the end of 2000.
Sierra Optima has posted a net profit of Rs 2.3 crore on a turnover of Rs 9.1 crore. The company is expecting a 70-75 per cent growth in turnover for the current fiscal. PAT is projected to grow at around 70 per cent.
The promoters hold around 50 per cent in Sierra Optima and institutions have three per cent holding in the company. The balance of the paid up capital is held by public (35.15 per cent) and NRIs (11.82 per cent).
The company, a 100 per cent export-oriented unit established in 1992, specialises in Oracle-based applications and has expertise in offering professional services such as migration of non-Oracle based applications to the Oracle environment, consulting services for enterprise resource planning and database administration. It also has a centre in India for offshore development. It also provides specialised services to customers using IBM and Microsoft technologies, through the effective use of strategic partnerships.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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